While the flat housing market which dominated last year has rolled into 2025, QV operations manager James Wilson said there was the potential for more “substantial growth” later in the year.
In the latest numbers from the QV House Price Index, residential property values have increased slightly, up 1.3% on average nationally in the January quarter.
The average house is now worth $913,567 – 1.3% less than at the same time last year and 14.1% below the market peak in 2021.
Wilson said the slow start has been expected, due to the economic factors at play such as high interest rates, credit constraints, a weakness in the labour market, and an oversupply of properties for sale.
Despite that, the upcoming year could be an “intriguing” one for the market.
Wilson said there have been less home value reductions, and what little growth there is does appear to be trending “slightly upward”.
“At the same time, mortgage rates are falling and property sales volumes are building, which could pave the way for more substantial growth later this year.
“That won’t happen overnight, of course, but we will be actively monitoring this space with interest – as I’m sure many sellers, purchasers and investors will be throughout 2025.”
Across the main urban areas QV monitors across the country, only three had recorded modest reductions this quarter.
These areas were Whangarei (-0.3%), Hastings (-0.3%), and Queenstown (-1.5%).
Otherwise, Auckland (1.4%), Hamilton (2.3%), Tauranga (1.4%), Napier (2.9%), Dunedin (2.3%) and especially Invercargill (3.8%) all recorded above-average increases in home value throughout the three months to the end of January 2025, QV said.
Wilson noted there has been an “uptick” so far in 2025 in the number of properties on the market across most centres nationwide.
“Summer is traditionally the peak season for buying and selling, so it’s unsurprising to see more buyers and sellers in the market, especially as economic circumstances improve,” added Wilson.
“What will be interesting to see is how long it takes for this excess stock to be absorbed, because that’s when we will see demand start to push prices up in a more substantial way.
“Once again, this will not happen overnight, but further interest rate reductions will certainly quicken the process.”
For now, Wilson said the cost of borrowing remains “relatively restrictive”, and both the economy and job market is “doing it tough”.
“Investors and owner-occupiers are showing increasing interest in the property market but remain cautious overall, while first-home buyers are continuing to make up a larger proportion of the market in the meantime.”
